Friday’s news of Moody’s downgrading U.S. debt? Retail investors saw it as a buying opportunity.
According to JP Morgan’s Emma Wu, retail traders poured $4.1 billion into U.S. stocks in just the first three hours of trading on Monday — the largest single-morning inflow on record.
That buying helped erase overnight losses, with the S&P 500 finishing the day up 0.09% — breaking the pattern of immediate post-downgrade declines. In the two previous U.S. credit rating downgrades, markets opened notably weaker the next trading day.
This time? No panic.
That doesn’t mean the downgrade is irrelevant. But it suggests that investors have either:
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already priced it in, or
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don’t see it as a major concern — at least for now.
Of course, a downgrade is still a downgrade. No country, company, or municipality aims for one.
In past cycles, equities struggled for a few months before recovering. Will history repeat… or is this time different?
